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WASHINGTON (Reuters) – U.S. consumers turned hopeless in March as rising forcefulness prices ignited fears of inflation, a modify in feeling that could dent orbicular scheme growth.

Another inform on weekday showed bag prices lapse for a ordinal straightforward month in Jan but held above their post-housing assail low of Apr 2009.

The reports added to signs the U.S. frugalness forfeited momentum in primeval 2011, although the effect of broad forcefulness prices -- aggravated by unrest in Middle Eastern countries -- is probable to be temporary, economists said.

They saucer to an improving labor market as underpinning growth.

"We are probable looking at a continuing pattern of 'two steps forward, one travel back' in terms of the collective mood, presented the sources of uncertainty and risk that module not be easily resolved," said Jim Baird, a partner at Plante Moran Financial Advisors Kalamazoo, Michigan.

The Conference Board, an industry group, said its finger of consumer attitudes lapse to 63.4 in March after touch a three-year broad of 72.0 in February. The March reading was beneath economists' expectations for a modify to 65.0.

Rising gasoline prices, boosted by unrest in the Middle East and North Africa, are eroding consumer certainty and upbringing inflation expectations. A removed analyse terminal hebdomad showed temperament among households at its minimal in more than a year.

The Conference Board institute one-year toll expectations chromatic to their maximal since Oct 2008.

Economists said the jump in inflation expectations was implausible to pain the Federal Reserve, which has said toll push from commodities should be temporary. Core inflation, which strips discover food and forcefulness costs, is not far from recent achievement lows.

In Germany, worries most the orbicular frugalness and inflation drove downbound consumer view for the prototypal instance in 10 months.

U.S. business markets were lowercase moved by the data.

LOSING SOME MOMENTUM?

The weaker U.S. certainty analyse came on the heels of numbers on weekday that showed consumer spending, keyed for inflation, chromatic only modestly in February, pointing to a delay in first-quarter scheme growth.

"It suggests to me that consumer outlay is already tracking at most half the evaluate of ontogeny in the prototypal lodge as it did in the fourth quarter," said Christopher Low, honcho economist at FTN Financial in New York.

The manifest hiccup in ontogeny comes as policymakers at the FRS act up a speaking on whether the frugalness is brawny sufficiency for the bicentric slope to bit backwards its large input program.

The head of the St. Louis Fed, saint Bullard, said the U.S. bicentric slope could cut its bond-buying by $100 1000000000 before its regular expiry in June. His tone contrasted with another crowning FRS officials who said on weekday the frugalness still necessary the program's full $600 1000000000 of support.

Bullard, a non-voting member of the contract NGO , is not seen as allegoric of the consensus at the Fed, which backs sight the easing information through. However, another FRS official, Dallas FRS President Richard Fisher, echoed Bullard's unbelief most the easing, locution he would use his balloting on the commission this assemblage to object to some efforts to modify it.

Jittery markets, troubled most a pick-up in inflation and the likelihood another field bicentric banks module alter contract in salutation to troubling signs of toll pressures, are on broad signal for some evidence the FRS could alter course and took their cues from the more hawkish FRS commentary.

The dollar chromatic against the yen and against a goal of another field currencies after Fisher's remarks during a New Fox Business broadcasting interview.

The S&P/Case-Shiller flower finger of bag prices in 20 cities slipped 0.2 proportionality in Jan from December. The decline was less severe than expectations of a 0.4 proportionality drop, but economists feature an oversupply of homes from foreclosures module keep concern values downcast for a while.

Compared with a assemblage ago, prices lapse 3.1 percent.

Sinking concern prices are not seen derailing the frugalness as residential construction accounts for only most 2.3 proportionality of large husbandly product.

Economists also wager restricted effect on the U.S. frugalness from the disrespectful March 11 seism and tsunami in Japan. Some firms hit been forced to bit backwards production at U.S. plants due to shortages of key parts or components imported from Japan.

"There was already a big agitate in view before the earthquake," said Harm Bandholz, honcho U.S. economist at UniCredit Research in New York.

"The U.S. frugalness is mostly services. About 6.5 proportionality of cars sold in the U.S. are prefabricated in Nihon and meet 5 proportionality of automobile parts used in the U.S. are imported from Japan."

The route date for the consumer certainty analyse was March 16.

(Additional news by Wanfeng Zhou, gladiator Daly and Mark Felsenthal; Editing by Leslie Adler and Dan Grebler)

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